Ms. Ibukunoluwa Odegbaike is the Managing Director of Guaranty Trust Bank, East Africa. Ms. Odegbaike has over 19 years banking experience spanning operations and sales and marketing.

Ms. Odegbaike is involved in the overall management of the bank’s day-to-day operations.

Before her appointment to her current role, Ms. Ibukunoluwa held various positions at Guaranty Trust Bank Plc, Nigeria. She joined the Bank in 1996 as an officer in Transactional Services Group of the Bank. Subsequently, she headed the Bank’s Private Banking Group in charge of portfolio management of the high net worth individuals of the Bank.

Before joining Guaranty Trust Bank (Kenya) Limited, she was the Head of Retail Banking, in charge of developing, executing and managing both the financial inclusion and retail strategy and tactical business plan of the Bank. This includes target market selection, customer and product propositions within the broad framework of the Bank’s strategy.

She holds a Bachelor of Science degree in Biology from University of Lagos, Nigeria and has attended several senior management courses including the INSEAD high performance management programme and Cranfield executive leadership programme.

Morning Guys ..why do banks charge customers exorbitant loan processing fee's(in %) while sacco's dont,when both are in the same business of lending?..

Chat Admin

Thank you Tony. We have logged your question and will put to Mr Gachora when he joins us.

nuru mugambi

morning donald...

Tony Shilako

Thanks Admin.. will be waitin

KENNETH NJERU

Good morning, bold step to chat with customers either to get a feedback or improve services. why have hidden charges but when signing forms no indications Two, how best can you handle my first home and car.let me know

Chat Admin

Mornign Kenneth and thank you for your question. We have logged it and it will be addressed once the chat gets underway.

Chat Admin

Sorry... Morning!

nuru mugambi

Njeru thanks for joining...it is a bold step...but it is important to have a productive dialogue

KENNETH NJERU

Morning Nuru, will try to make it productive.

karimi nthiga

Morning, do you think it would be a good strategy for financial institutions to offer business mentorship services especially to customers who have accessed credit for their first business venture in a move to encourage more people to take up credit for enterpreneurship ventures?

Angela Ngethe

Morning, great way to interact with bank CEO- my question is similar to Kenneth's on how best to handle my first home loan, however in my experience over the last 2 years I have found owning a home is still too expensive for middle income earners. Is NIC bold enough to come up with a more affordable mortgage facility? What justifies these high rates anyway?

nuru mugambi

Angela...welcome back...good to see you

Angela Ngethe

Nuru, hello there and great to see you too - after a long time

Chat Admin

Morning once again. We are about to start. Reminder to upload your profile picture to make things more interactive.

Chat Admin

Thank you Karimi and Angela for your questions. They have been logged

Chat Admin

Thank you to everyone that has logged in and especially to those that have posted questions already.

Chat Admin

We look forward to an informative chat and please continue to post your questions and comments as we progress.

Chat Admin

Ladies and Gentlemen, allow me to welcome Mr John Gachora to the CEO Chat session this morning.

Chat Admin

Ladies and Gentlemen, we welcome Mr John Gachora Group CEO NIC Bank to this mornings KBA CEO Chat Session

John Gachora

Good morning, welcome to the KBA organised CEO Chat.

John Gachora

I see already we have received a number of questions which we shall be addressing shortly...

John Gachora

...we shall try to restrict ourselves to the main topic at hand, which is competition in the banking industry and how that relates to the cost of credit

John Gachora

but certainly any other questions will be welcomed

John Gachora

Hi Kenneth

KENNETH NJERU

Morning, Mr Gachora.

John Gachora

the good thing about the new APR regime is that it creates full transparency for all charges relating to your loan whether those charges are from the bank or from other third party service providers such as lawyers, and government offices

John Gachora

...going forward you will be able to see all these hidden charges reflected in the rate so called APR or annual percentage rate that should be disclosed to you by your bank...

KENNETH KATIECHI

What prompted you to choose banking over Engineering yet you had a Masters degree from the great MIT?

John Gachora

as for your first home and car...please contact us customercare@nic-bank.com

John Gachora

Morning Tony

KENNETH NJERU

Thanks for the ARP hint

John Gachora

welcome Kenneth

John Gachora

To answer Tony's question about SACCOs versus banks...

John Gachora

...SACCOs and banks are fairly different in the type of loans they are able to issue

John Gachora

for instance...whereas SACCOs will often require you to have up to 10 co-signers, banks will typically not ask for co-signers but will need therefore to spend a bit more money to protect the bank in the legal and security documentation process upfront

John Gachora

Morning Karimi...

John Gachora

...I fully agree with Karimi in that banks need to do more to enhance financial literacy

John Gachora

in fact, through KBA we have a number of programs, including this one (CEO Chat) that is aimed at engaging with customers to educate them at all levels of their engagement with banks

John Gachora

Also many banks have business clubs for small business owners...through which they disseminate training, and facilitate networking. For example, at NIC we have the Entrepreneurial Club through which we hold training conferences to educate our clients.

John Gachora

I see a question that came up on Twitter...regarding competition.

Patrick Opiyo

Morning John, what do you forsee happening in the banking landscape with Equity's entry in the mobile space with the acquisition of an MVNO license and potential rollout? Paradigm shift in the way we transact with banks?

John Gachora

There are 44 banks operating in this market, seven micro finance banks, and over 150 SACCOs. Clearly this demonstrates that we have the right level of competition and a lot of room for any new, innovative solutions.

John Gachora

Kenneth...i see your question about my career choice...its a long story! ...maybe we will touch on it as we wrap up

John Gachora

Morning Patrick...good to see you online

Meredith Njenga

Hello John,

ADAM muthama

Morning John, Competition among banks has increased...making consumers choose a bank based on benefits. My question is the banking industry facing unfair competition...and what are the implications on Kenyans? What are the stake holders doing to address this unfair competition?

Kelvin Mbaabu

Dear Mr. Gachora, kindly advise whether the KBRR rate shall have an effect in reduction of interest rates in the long run?

John Gachora

Kenya has been ranked as one of the most innovative countries when it comes to mobile money. I view the entry into the MVNO business as just another step in this journey of giving customers more choices in the mobile money business.

John Gachora

Hi Meredith

John Gachora

Morning Kelvin

John Gachora

The idea of KBRR is to create more transparency and enable comparison of pricing across banks

Meredith Njenga

One important thing about Market Competition is on how one define the market size: in the Kenyan context, the banking sector can be grouped into three tiers : large, midsized and small banks . Given that the number of banks in the large sized tier are few , what are your thoughts on these banks abusing their dominance to charge unfiar credit rates?

STEPHEN MUSUNGU

Good morning John, KBA together with various stake holders have introduced various pricing mechanisms that were thought to bring the cost of credit down. However this has not happened. what really constitutes the cost of credit?

John Gachora

KBRR alone will not reduce interest rates because pricing depends on a number of factors, including macroeconomic environment, government borrowing, inflation, and customer credit risk

John Gachora

Currently, macroeconomic indicators support a long term reduction in interest rates

Lena Sitoyo

Morning John, Should we expect to see banks merging owing to the increased competition?

STEPHEN MUSUNGU

Secondly what are the likely implications on the cost of credit, interest rates by the proposed or rather anticipated increase by all banks of their capital reserve from the current 12% to 14.5% by 31.12.2014

John Gachora

Hi Adam, i see your question...but can you please clarify? From whom is the unfair competition? Thanks

Tony Shilako

Banks are required to provide loan applicants with a breakdown of the Total Cost of Credit , has ths started already ?

KENNETH NJERU

sorry having an adhoc meeting to discuss budget in the office, will follow later

Chat Admin

No problem Kenneth. The full transcript will be posted in the Archives section of the chat platform after the chat has concluded.

JACKSON OKOTH

hallo sir, i have always wondered why with 43 commercial banks, cost of credit remains high with little product differentiation between the players. Why is this so

John Gachora

Morning Stephen, the cost of credit is made up of a number of factors, namely, cost of funds, operational costs, cash reserve cost, third party costs and credit risk costs. A number of these also depend on the macroeconomic situation as well as inefficiencies in terms of third party services, for example legal costs, judicial costs, government process, etc.

JACKSON OKOTH

How do factors like cost of living index or inflation and the exchange rate position, feed into cost of credt?

John Gachora

Regarding the point on capital reserve, while it adds pressure on return on capital, it also creates the need to lend more or to deploy the capital more urgently...The two should, in my opinion, balance out and therefore should not have a significant effect on the interest rate

John Gachora

Dear Meredith...That is a very insightful question. There are six banks that are considered to be large tier banks...six is still a large number of banks given our market size. And the rest of the banks are very aggressive, therefore, I dont particularly think that the large banks can abuse their dominance.

John Gachora

Hi Lena...

JACKSON OKOTH

Hallo Sir, more than 50 per cent of all profits made by the entire banking industry is generated by only the 5 top banks while the rest scramble for the remaining crumbs? What doe this say about state of competition in Kenya's banking sector?

John Gachora

...to Lena's point about banks merging due to competition...in the short term i believe there are enough opportunities for the banks in this market. In the long term, we may certainly see a number of banks deciding to merge or align to go after larger opportunities.

Angela Nyabera

Hi John, thanks for conducting the chat. I’m a big fan of the current direction of competition and diversification in credit services. Do you think the level of competition and diversification will affect stability of the market? And is the play ground level for everyone involved to participate freely and market forces determine overall performance?

benjamin muli

Morning Mr. John,very many changes have been witnessed in the banking industry in the recent past,do we expect the to see the small banks exiting the industry due to the increased competition and is the consumer likely to benefit from the same?

John Gachora

Hi Jackson...

John Gachora

...To answer your question about inflation and exchange rate...

Joan Wairimu

Hello., anybody here or my chat page has issues?

Chat Admin

Hi Joan, yes we see your comment. Have you clicked the green bar to load old messages?

John Gachora

...on inflation, that determines where the central bank sets the monetary policy, the CBR, and where the market trades the T-bills. Today, KBRR is determined by these two factors directly. And therefore that translates into the industry base interest rate. As for exchange rate, it is a good indicator of inflation, not to mention a number of banks have funded themselves using foreign currency (an exposure that they must cover).

JACKSON OKOTH

thank you for the insights

JACKSON OKOTH

with inflationary pressure on the upward trend over the last four months, do you think this might force monetary policy commitee to adjust the CBR at their next meeting?

John Gachora

Thanks Jackson, you also make a good observation about the top 5 banks...but one must reflect, only a few years ago we talked about only the top 3 banks...and the landscape has changed, we now talk about top 6, and there is good reason to believe other competitors are closing in on these top six. Luckily this situation is not unique to Kenya. As in most countries, there is always the top four or top 5 banks that control the market share.

John Gachora

Hi Angela...thanks for joining us...i believe the current competition augers well for the stability of the financial markets. An efficient market also creates a level playing field for everyone involved.

John Gachora

Hi Benjamin, the good news is that the Kenyan banking market as a whole has been expanding therefore I believe there is enough opportunity, even for the smaller banks, to find their right niches.

John Gachora

Welcome Joan.

John Gachora

Jackson, you are right. Inflation and short term rates have been on an upward trend in the last couple of months. However, the MPC will certainly consider the fiscal position of the government, and its contribution towards monetary tightening before they can decide on the direction to take on the CBR.

JACKSON OKOTH

interesting views i must say from a conservative banker

Chat Admin

Ladies and Gentlemen, our time is almost over so if there are any more questions please send them through now. Many thanks for your contributions thus far.

John Gachora

I think Jackson, to address your question on cost of credit it is worth noting that interest rates overall have been coming down in the last many years. Except for the spike that we saw in 2012, interest rates have generally trended downwards. Between 2012 and today, average loan rates have dropped from over 20 percent to the current 15 percent. On the other hand, deposit rates have actually gone up. For savvy customers, fixed deposit rates offer a very good investment option. And generally high rates. A lot of this has been aided by the stiff competition among banks, Micro Finance Institutions and SACCOs.

JACKSON OKOTH

good stuff

John Gachora

I saw Tony's point from earlier about the new disclosures. Banks are eager to do so but as with anything new, it is a continuous process.

John Gachora

Thanks everyone who joined us this morning.

Tony Shilako

Thanks Sir for the insight

JACKSON OKOTH

Thank you sir for the insightful comments

FREDRICK YUAYA

Thank you.

John Gachora

We at KBA are eager to engage to ensure that we are continuously improving the banking sector.

John Gachora

While competition remains stiff, we are aware that the only way to survive is to partner with you our customers.

John Gachora

Please continue to engage with your bank to ensure that your concerns are addressed and more importantly, to continue building on financial literacy.

John Gachora

I thank KBA for organising this session.

KENNETH NJERU

I thank your for the insights

John Gachora

I wish all of you a great weekend.

Chat Admin

Ladies and Gentlement allow me to take this opportunity to thank Mr John Gachora for being with us today and for his insights. We would also like to thank you all for your questions and interaction that has made this session a success. This is our third and final chat session in this series on the Cost of Credit. You can however get copies of the transcript, podcasts and other information relating to this and all past chats in the Archive page of the chat.kba.co.ke website. Please also visit http://www.costofcredit.co.ke/ for more information on the Cost of Credit and dont forget to download the mobile app!!

Terms and Conditions

If you utilize the CEO Chat Registration Form you are agreeing to comply with
and be bound by the following terms and conditions of use, which together
with our privacy policy govern Kenya Bankers Association relationship with
you in relation to KBA website(s).

The term “Kenya Bankers Association”, “KBA” or “us” or “we” refers to the
owner of the website whose registered office is P.O. Box 73100 - 00200, Nairobi,
Kenya. Our Association is registered in the Republic of Kenya. The term “you”
refers to the user or viewer of our website.

The use of this website is subject to the following terms of use:

The content of the pages of this website is for your general information and use only. It is subject to change without notice.

Neither we nor any third parties provide any warranty or guarantee as to the accuracy, timeliness, performance, completeness or suitability of
the information and materials found or offered on this website for any particular purpose. You acknowledge that such information and materials may contain inaccuracies or errors and we expressly exclude
liability for any such inaccuracies or errors to the fullest extent permitted by law.

Your use of any information or materials on this website, including online conversations or chat sessions or visual, video and audio
presentations, is entirely at your own risk, for which we shall not be liable. It shall be your own responsibility to ensure that any products,
services or information available through this website meets your specific requirements.

Participants of online forums hosted by and endorsed by KBA must be
a minimum age of 18 years. By acknowledging this age requirement
via registration form you certify that you are at least 18 years old.

This website may contain material which is owned by or licensed to
KBA. This material includes, but is not limited to, the design, layout, look,
appearance and graphics. Reproduction is prohibited other than in
accordance with the copyright notice, which forms part of these terms
and conditions.

All trademarks reproduced in this website, which are not the property of, or licensed to the operator, are acknowledged on the website.

Unauthorized use of this website may give to a claim for damages and/or be a criminal offence.

From time to time this website may also include links to other websites.These links are provided for your convenience to provide further
information. They do not signify that we endorse the website(s). We have no responsibility for the content of the linked website(s).

You may not create a link to this website from another website or document without Kenya Bankers Association’s prior written consent.

Your use of this website and any dispute arising out of such use of the website is subject to the laws of Kenya.

Copyright and Trademarks

“my chat with a bank CEO”, “my CEO Chat”, “my 15min chat with a bank CEO”, “If you had 15mins with a bank CEO, what would you say or ask?”, “If
you had 15mins with a bank CEO, what would you talk about?”, “my 15min chat with a bank CEO”, “my bank CEO chat”, “myCEO chat” are all registered trademarks of the Kenya Bankers Association.